Has The Internet Become Indispensable?

Empirical Findings and

Model Development

Donna L. Hoffman, Thomas P. Novak and Alladi Venkatesh

Donna L. Hoffman is Professor of Management and Co-Director of the Sloan Center for
Internet Retailing at Vanderbilt University. email: donna.hoffman@vanderbilt.edu

Thomas P. Novak is Professor of Management and Co-Director, Sloan Center for Internet
Retailing Vanderbilt University. email: Tom.Novak@owen.vanderbilt.edu

Alladi Venkatesh is Professor of Management and Computer Science and Associate

Director of the Center for Research on Information Technology in Organization (CRITO)
at the University of California, Irvine. email: avenkate@uci.edu

Portions of this study were funded by the United States National Science Foundation
grant Nos. IRI-9619695 and SES – 0121232 and the Vanderbilt University Sloan Center
for Internet Retailing. The authors thank the editor and four reviewers for their helpful
comments on an earlier draft of this manuscript.

April 11, 2004

A published version of this working paper appears as:

Hoffman, Donna L., Thomas P. Novak, and Alladi Venkatesh (2004),

“Has the Internet Become Indispensable?” Communications of the ACM, July, 47(7), 37-42.
 Has The Internet Become Indispensable? Empirical Findings and
Model Development

Introduction

We seem to be in the midst of an Internet revolution and entering the age of digital
connectivity. The pace of social change resulting from the diffusion of this technology,
both nationally and globally is, by many accounts, dramatic. In less than ten years, the
Internet has become indispensable to many people in their daily lives. What are the
consequences of this? In this paper, we introduce the idea that the Internet is becoming
increasingly essential to families and the society at large, present some data to support
our contentions and develop a conceptual model that allows for the testing of key
hypotheses related to Internet indispensability as next steps.

As Hannemyr (2003) has empirically demonstrated, “the adoption rate of the Internet has
exceeded that of earlier mass communication technologies by several magnitudes,”
making it an “irreversible” innovation. Studies have also shown that an important
consequence of an entire generation of our nation’s youth growing up with the Internet is
that Internet use is gradually displacing television as their main source of entertainment,
communication and education (Lenhart, et.al. 2001).

In this paper we explore the idea that the Internet has become indispensable to people in
their daily lives, and develop a conceptual model that allows us to address the research
questions this idea raises. The idea is that the Internet has become so embedded into the
daily fabric of people’s lives that they simply cannot live with out it. How is the Internet
indispensable and in what ways? For which groups of people is it indispensable, for what
tasks, and how has this changed their lives and our society as a whole?

We take on these questions as follows. First, we provide some data from two national
studies of American households that support our contention that the Internet has become
indispensable on several key dimensions. Next, we summarize broader discussions of
indispensability drawn from the literature. Then, we present our conceptual model and
suggest research directions for the future. We conclude with several comments on the
social and policy implications that arise from the fact that increasing numbers of
individuals would be unwilling to give up their access to the Internet if asked, as they
have come to consider it indispensable.

The Internet is Becoming Increasingly Indispensable

Numerous studies demonstrate the changes in user characteristics and patterns of Internet
use. Space limitations preclude an exhaustive analysis, but we refer the interested read to
the supporting references.

2
Important Internet Usage Trends Among the General Population, College Students
and Families in the United States

Table 1 summarizes the evolution in Internet user characteristics in the general U.S.
population over time. These data were gathered from the Pew Internet and American
Life Project (Madden 2003). The number of adult Americans using the Internet has
increased 50% from 2000 to 2003, reaching 126 million users in 2003. Most of this
increase is accounted for by individuals 30 years and above, although younger users are
still the most wired. The increase is recorded among both men and women equally. In
terms of race, blacks show the highest increase during this period, although they still lag
behind Whites and Hispanics.

(Table 1 about here)

Compared to the general population, college students are its heaviest users. By
2002, fifty nine percent of all Americans had ever gone online, compared to
eighty six percent of all college students (Jones 2002). College students report
that the Internet has become an integral part of their education and has actually
enhanced their educational experience. It is used for managing all aspects of their
academic and social life. The Internet is so pervasive in the lives of this
generation that it has become a natural extension of their selves. College social
life has been fundamentally transformed by the Internet.

Longitudinal data gathered by one of the authors as part of the National Science
Foundation supported Projects NOAH and POINT at the Center for Research on
Information Technology at the University of California at Irvine support our contention
that the Internet has become indispensable in contemporary social life. The study design
included national probability samples of 906 and 1200 American households for the years
2000 and 2003 respectively1. A demographic summary for the samples appears in Table
2.
(Table 2 about here)

In 2000, over three-quarters (77 %) of computer-owning households in the sample

reported having an Internet connection in the home; by 2003, this figure had jumped to
94%. This supports many other surveys suggesting that the Internet is now ubiquitous.
Both the 2000 and 2003 samples acknowledged the Internet to be a major source of
communication and information.

Top in-home applications among regular computer users include email, games and
hobbies, news and information, travel and vacation planning, online shopping, and health
information seeking (See Figure 1). The biggest changes from 2000 to 2003 are in online
banking (24% to 60%), online shopping (40% to 76%), gathering health information
(46% to 76%) and travel/vacation planning). Many other uses of computers have
developed in the past few years. Thus for example, other salient applications in 2003 for

1
A detailed description of the sampling frame and these data and the NOAH and POINT Projects is
available at http://www.critio.uci.edu/.

3
which data were not available for 2000 are instant messaging, accessing government
services, and participation in community activities, all via the Internet. These various
developments indicate how the technology has become domesticated in the last few
years.
(Figure 1 about here)

Additional analyses (not presented) show that Internet users are increasingly satisfied
with their online experiences. In 2000, slightly less than half (49%) of the users were
satisfied with the ease of getting online; this rose to nearly three quarter of all users
(71%) by 2003. Users are also more satisfied with Internet access speeds (32% in 2000
compared to 52% in 2003). Clearly, technological standards and quality are constantly
improving and these technology improvements are having important, positive effects on
satisfaction. Internet users’ overall experiences increased in satisfaction from 64% to
76% from 2000 to 2003.

Table 3 addresses the impact of the computer on people’s lives, as the computer has
become virtually indistinguishable from the Internet for many people. The change from
2000 to 2003 in perceptions of computers can be interpreted, in part, as due to the
increase in home Internet connectivity mentioned above. From 2000 to 2003, more
people reported that computers had become part of their daily routine (52% to 62%);
facilitated increased contact with friends and relatives via email (48% to 54%); changed
how they do things at home (40% to 45%); and replaced the telephone as the major
communication device (10% to 16%). In somewhat broader terms, over this three year
period, more people reported that it would be to difficult imagine life at home without
computers (44% to 50%), and that the computer is as essential as any other home-based
technology (39% to 51%).

(Table 3 about here)

Taken as a whole, these results reveal important developments in Internet use. There are
changes in the inherent characteristics of the Internet and Internet use is diffusing into
new areas. The Internet continues to be an information and communication tool, but the
types of information sought on the computer have expanded considerably. The Internet
has also become a major home management tool as it is now used extensively for online
shopping and financial management. The Internet is becoming indispensable to many
daily activities.

What Does it Mean For Something to Be Indispensable?

The above results show that on many fronts, the Internet has made its mark on people’s
lives. But what does it mean for something to be indispensable?

Notions similar to indispensability have been researched in consumer environments by

various scholars who have used equivalent terms such as “necessities”, “essential
products,” or “products one cannot do without.” Such indispensable products can be at

4
one extreme very utilitarian and functional or at the other extreme very symbolic with
great personal significance. Products of the opposite character – dispensable products -
are deemed to be frivolous, unnecessary wasteful, hedonic luxuries, or products one can
do without. The research questions in this area address consumer dispositions toward
such products, the level of dependence, and the process by which products achieve the
indispensability status.

We believe that something becomes indispensable if it becomes part of one’s daily

routine. Daily routine (examples include reading a newspaper, watching the news on
television, checking one’s email) leads to ritualization of activities (for example, reading
the morning paper, watching the evening news, checking one’s email each day during
breakfast).

This ritualization provides a sense of security and predictability. Ritualizing daily

routines helps people cope with day-to-day stresses and strains. In the long run, familiar
routines can even lead people to be more efficient and productive and feel more satisfied.
For those for whom the Internet is a daily ritual, the lack of Internet access will be
perceived as a disruptive event. Thus it is important to note that the notion of guaranteed
access is closely linked to indispensability.

Daily routines involve micro-level practices. Much of the Internet rhetoric includes grand
schemes and major changes in the economy and society. While these are certainly
worthy of attention, we believe that the indispensability of the Internet arises not from
such grand schema but from micro-level practices. That is, it is the small things that
people use the Internet for on an everyday basis that makes it so integral to people’s lives.

Finally, it is a fact that some individuals are more technologically savvy than others. We
consider them to possess the highest technological capital. Because they have the
technological capital, they also have the social capital to go with it. The relationship
between the technological knowledge of people and their social empowerment has been
discussed widely in the literature (Robalino 2000). The argument presented is that in a
knowledge economy, knowledge becomes a critical as well as a controlling resource.
The power knowledge bestows on individuals is translated into social capital. This
explains why in the Internet age so much attention is paid to young people including
children who seem to be on the forefront of technological developments with power to
shape the future. The difference between these savvy individuals and those less savvy is
one provocative way to define the digital divide. According to one estimate, the tech-
savvy represent 30% of Internet users (Shih and Venkatesh 2004) and includes three sub-
segments: the technological sophisticates, highly educated high socio-economic status
individuals, and college students. For these groups, the Internet is not only indispensable
but central to their very lives.

5
 A Conceptual Model of Indispensability

We developed a conceptualization of Internet indispensability (See Figure 2) as a model

to guide our investigation. This model provides a conceptual framework that allows us to
address a series of important research questions, along with their individual, social and
policy consequences. We consider individual behavior to be constituted by a set of
socio-cultural, technological, and individual-psychological elements that operate on
various levels. The socio-cultural elements are generally considered to be at the macro
level. The individual and psychological elements are at the micro level. Technology
permeates all levels. The individual is simultaneously subject to all these forces. As we
will describe, the outcome of user behavior in the Internet environment results in a series
of “experienced dualities” (e.g., Mick and Fournier 1998) which lead to a transformation
process that alters the self-identity of the individual. In this case, the nature of the change
in self-identity is a conviction that the Internet is indispensable for the individual.

Conceptually, as Internet activities become part of the daily routine of individuals and
social groups, the Internet becomes integrated into their lives. Formally, we state that the
first set of conditions for Internet indispensability relate to its ubiquity in both socio-
cultural and technological contexts. We define ubiquity in terms of two major elements
in the model—the different segments of the society using the Internet and the contexts of
use (Box 1), and the access points for its use (Box 3). The underlying idea is that as more
segments of the population use the Internet in different contexts (work, family, school
etc), the greater its diffusion and potential impact. Similarly, the greater the access points
for the Internet the greater its use and impact.

(Figure 2 about here)

There are also a set of technology-related antecedents, inherent to the Internet medium
itself (Box 2). These enabling characteristics – fundamental properties of the Internet
environment - specify the power of the technology, its versatility and its productive
potential. The enabling characteristics define a computer-mediated environment which
literally calls out for multiple access points to function optimally for its users. Thus, a
related technological aspect is the prevalence of access points for the Internet (Box 3)
which represents the ubiquity of the Internet, and directly impacts the nature of Internet
users’ daily routines and activities.

A third determinant of activities performed on the Internet is individual in nature (Box 7).
This recognizes the fact that individual difference variables including personality
characteristics, needs, and demographics are important determinants of online behavior.
Together, these three categories of determinants impact the individual’s daily routines
and activities, impact the way the individual uses the Internet in their life (Box 4).

A critical intermediate consequence of our model is the nature of people’s experiences as

a result of their engaging in the daily routine of Internet use. We represent these
experiences in terms of a set of dualities (Box 5). The dualities represent the limits of the
Internet (positive and negative) and the general tension that the Internet creates among

6
users (see also Mick and Fournier 1998). A natural consequence of these experiences is
the transformation process (Box 6) that Internet use imposes on the individual, society
and the economy.

Many of the activities that individuals engage in online are really the seeds for major
transformational processes. In this way, the cumulative effects of micro-level phenomena
can lead to social transformations on a major scale. This could include the formation of
new practices and behaviors, new social relationships and transaction modes, new
communication patterns and the like. Note that the overall impact of transformation will
not be the same across all social groups and individuals.

Transformation means you have a new identity and sense of self. Consider email use as
an example. Individuals start to use email for practical benefits, to communicate with
friends, family, or co-workers. It is doubtful that any new user would find such use
immediately indispensable. As the user gains more experience, a number of dualities will
be experienced. Email empowers the individual by giving them a capability for
instantaneous communication they did not have before, but as the incoming volume of
email begins to accelerate, and the pressure to keep up with email exchanges builds, a
sense of entrapment ensues. The user must work through this empowerment/entrapment
duality, and alter his or her behavior or thinking in ways that permit a successful
resolution. Much of this behavior change involves the establishment of new rituals, in
this case, daily rituals for managing one’s email. We noted earlier that ritualization is an
important component of indispensability. Successful change is a positive experience,
engendering increased confidence, more self-assurance, competence, confidence and
mastery. Such users now feel they are in control of email, rather than email controlling
them.

The key outcome of this transformation process is the indispensability of the Internet
(Box 8). In our model, indispensability can arise through two different paths:
experiential or rational (see, for example, Epstein 1994 for a discussion of experiential vs.
rational thinking styles). We discuss the experiential path first. As noted, dualities
(tensions or conflicts) are experienced as the individual uses the Internet to perform
various activities. If the dualities introduced by the use of the Internet are successfully
resolved, transformation results from the resolution of the conflicts that the Internet
presents. These transformations feed back in the model to impact both the individual as
well as the larger social system. Indispensability is a key individual outcome. We call
this “experiential” indispensability as it represents a long-term, persistent change in the
individual’s feeling and inherent belief system that the Internet has become indispensable
to her/him.

Additionally, we theorize that the Internet can also become indispensable on a short/term,
transient basis as it allows essential activities to be conducted with a favorable
cost/benefit ratio. This type of indispensability, through a rational path, is much more
easily shaken by introduction of an innovation which better meets the individual’s needs.
It is the more traditional view of indispensability, and does not arise from a
transformation process stimulated by the resolution of an experienced duality.

7
Finally, the tension between structure and agency (Orlikowski 1992) is central to the
notion of how indispensability is played out; Internet indispensability relies on the role
played by both structure (Box 1) and agency (Box 7) in determining the various activities
that individuals engage in (Box 4).

The Consequences of Indispensability

Some of the broader issues in Internet development concern individual and social
consequences of indispensability, and their larger implications to, for example, social
welfare and policy issues. At the individual/social level, the issues include but are not
limited to: altering perceptions of the space-time continuum, human communication and
interactions at local and global levels, blurring the boundaries between the real and the
virtual, the paradoxical nature of technologies, and both positive and negative
psychological consequences.

Two important policy debates include the digital divide (Hoffman and Novak 1998;
Warschauer 2003) and the ongoing controversy over the impact of computers on
education in our schools (Cuban 2003). Research shows that the Internet has not touched
all segments of our society equally: the lower socio-economic levels are among those
least likely to enjoy access.

Further, digital divides occur not only between the poor and the rich, but across many
other segments—urban versus rural and lower income school districts versus higher
income school districts and so on. Federally mandated programs such as universal
service and the e-rate program seek to redress these balances, but the efforts have been
highly controversial (Cooper 2002). Thus, while the Internet has indisputably become an
essential part of everyday life - and indispensable in many ways - for many individuals in
our society, Internet access remains elusive. What price will those individuals, and our
society, pay?

An additional triplet of issues that we expect will continue to gain in importance in the
next decade concern privacy, protection and security. The Internet’s ubiquity has a dark-
side, as identity theft reports mount, offensive messages persist, and society angsts over
the potential impact of unfiltered information available to children.

This tension between the Internet’s enormous potential and user expectations is likely to
remain as the pace of technology continues unchecked. The conceptual framework
proposed here provides a foundation that will allow us to address these issues in depth.

8
 % of households reporting use
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*Data for 2000 not available for the last five uses ov em
Figure 1: Household Internet Use 2003 and 2000

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9
2000
2003
 Figure 2: A Conceptual Model of Internet Indispensability

Transformation impacts the social system

1. Usage Segments
and Contexts of Use
(Socio-Cultural Structure dominant path
(contexts of Internet use)
Determinants)

Media
Educational (school, college)
Professional/Work Groups
Family Social Settings
Commerce/economic exchanges
Politics/citizenship
Spiritual/Religious groups
Institutional/Organizational settings
Personal friendships/networks

2. Enabling
Characteristics
Communication/Interactivit
y (human and machine)
Information (search,
retrieval, display, storage)
Immediacy/Omnipresence
(anytime, anywhere)
5. Experienced
3.Access Dualities:
4. Daily Routines/ Complexity vs. Simplicity
Points
Activities Fast vs. Slow 6. Transformation Process
(Techno- Augment Memory vs. Cognitive
logical Overload
Communication Functions vs. Doesn’t function New sets of language, idiom.
Determinants) Entertainment New sets of social/cultural practices.
Empowerment vs. Entrapment
Information Gathering Connectivity vs. Isolation Identity New sets of relationships/objects
Work Shopping New configuration of time and space
Formation vs. Identity Loss
Home Education/Learning New sets of behaviors
Unification vs. Fragmentation
Mobile Work/Tasks Efficient vs. Inefficient
Offsite (hotel, airport, Personal vs. Impersonal
café) Synchronicity vs. Asynchronicity
Addressability vs Anonymity Experiential path
Transience vs Persistence (necessity,
essentiality, loyalty)

7. Individual –Level
Determinants 8. Indispensability

Personality (innovativeness) Rational path (relative advantage, cost/benefit) Long term: Dependence
Needs, Interests integration and identify change
Agency dominant path
Demographics (individual choice to use (experiential path)
the Internet)
Short term: Transient
cost/benefit change (rational path)

10
Table 1. Characteristics of American Internet Users (Drawn from Madden 2003)

Year 2000 Year 2002 Year 2003

No of Adult Americans 86m 126m
Online
Size of the online 52m 66m
population on a typical day
Men users online 49% 65%
Women users online 44% 61%
Broadband connection 31%
Email use 78m 102m
Instant messaging 39m 52m
Educational use 47m 63m

Users by Race
White/Caucasian 63% 64%
English Speaking 61% 62%
Hispanics
Blacks/African 45% 51%
Americans

Age Groups
18-29 64% 67%
30-49 56% 67%
50-64 36% 59%
65 and over 12% 22%

11
Table 2: Characteristics of Internet Households in 2000 and 2003 (Drawn from Projects NOAH and POINT*)

Study 1 Study 2
Year 2000 Year 2003

Sample Size 910a 1203

Household Income
15,000 or less 2.9% 3.0%
15,001 – 30,000 13.51 9.32
30,001 – 50,000 25.91 14.8
50,001 – 75,000 24.69 21.3
75,001 or more 33.01 45.9

Raceb
White 88.1% 84.66%
Black 3.6% 4.9
Hispanic 3.0% 3.5
Asian 2.2% 4.56
Other 1.5% 1.46

Highest Education
High School and Under 10.4% 7.6%
Bachelor’s/Post High School 61.4 56.0
Postgraduate 28.3 35.7

Children in Household
Yes 44.1% 42.4%
No 55.9% 57.6

Computer Households with Internet 77% 94%

Connection

Number of computers in use at home

One 73% 50.3%
Two 20% 30.7
Three computers 4.8% 11.7

12
 Four or more 2.5 8.1
(Mean number of computers per household) (1.39) (1.90)
*
Center for Research on Information Technology, UC Irvine, http://www.crito.uci.edu
a
Number of households in sample
b
Race taken as the self reported race of the head of the household.

Table 3: People’s Perceptions of Computers and Their Impact on Their Lives (drawn from Projects NOAH and POINT)

2003 2000 2003 2000

Agree % Agree % Disagree Disagree
% %
The computer has become part of the daily routine at home. 62 52 24 28
It would be difficult to imagine life without a computer at home 50 44 30 42
The computer has saved time at home. 51 48 25 33
The computer is essential as any other household appliance 51 39 29 41
The computer has changed the way we do things at home. 45 40 29 39
Households with computer are run more efficiently than household without a computer 22 15 46 59
Computers in the home take away from family interaction 27 22 46 53
Computers have made it easier to organize family and social events 34 NA 40 NA
I have more contact with friends and relatives now that I have email 54 48 28 35
The computer has replaced the telephone as the major communicative device in our 16 10 62 73
home
We watch less TV as a result of using the computer 25 27 52 49
Computers are more useful in the office than in the home 38 39 37 39
The computer has increased the amount of job related work I do at home 36 39 48 43
Computers are difficult to use 12 16 72 59
Those who are not knowledgeable about computers are falling behind 67 68 13 16
Computers give status to their owners 11 14 68 65

13
The Internet helps me look for product information 68 44 13 13
Having Access to the Internet makes me feel much better informed 53 43 21 21

14
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15